Now We Know Why She’s Dancing

Now We Know Why She’s Dancing

The Swedish pop band ABBA rocketed to global superstardom in the 1970s, with hits like Waterloo, Fernando, and, of course, Dancing Queen. Named for members Agnetha Fältskog, Björn Ulvaeus, Benny Anderson, and Anni-frid Lyngstad, ABBA is the one of the best-selling music groups of all time. They haven’t performed together since 1982. But that didn’t stop Ulvaeus and Anderson from turning their songs into a hit musical, Mamma Mia!, in 1999. Just one year later, they turned down an offer to reunite for 100 concerts and a billion dollars.

Lots of us are still embarrassed by the fashion choices we made in the 1970s. ABBA, whose members gained attention for glittering hotpants, sequined jumpsuits, and platform heels, is no exception. According to ABBA: The Official Photo Book, coming next month to celebrate 40 years since they won the 1974 Eurovision Song Contest, singer and guitarist Björn Ulvaeus confesses “in my honest opinion we looked like nuts in those years. Nobody could have been as badly dressed on stage as we were.”

But now, we’ve learned there was more than just bad taste at work. It turns out the band was working to avoid the Swedish National Tax Board! As The Guardian reported last week, “the band’s style was influenced in part by laws that allowed the cost of outfits to be deducted against tax — so long as the costumes were so outrageous they could not possibly be worn on the street.”

Sweden’s tax man has always taken a bigger bite of his citizens’ earnings than Uncle Sam. The Swedes’ top tax rate rose to 85% in 1980, at a time when Ronald Reagan was campaigning to take ours from 70% down to 50%. For 2014, their top marginal tax rate reaches 57% on income over about $88,180, versus a 39.6% top rate here. The Swedes also take 31.42% for payroll tax, versus 15.3% here. Apparently, taxes grow well in the cold Swedish climate.

So it might surprise you to learn that our tax code offers a version of the same deduction. Specifically, IRS Publication 17 says you can deduct the cost and upkeep of work clothes so long as you have to wear them as a condition of your employment and they’re “not suitable for ordinary street wear.” It’s not enough that you wear distinctive clothing — it has to be required by your employer (or essential for your business if you’re self-employed). And it’s not enough that you simply don’t wear your work clothes away from work — it “must not be suitable for taking the place of your regular clothing.” (We think Lady Gaga’s famous meat dress will qualify just fine.)

Ulvaeus himself is no stranger to tax controversy. In 2007, the Tax Board accused him of laundering royalty income through foreign accounts to avoid 90 million kroner ($12.8 million) in taxes from 1997-2005. Ulvaeus paid the tax as a precautionary measure, then appealed to his county administrative court, which eventually ruled in his favor.

We understand you want to pay less tax yourself. But we doubt you’re willing to rock a spandex sequined jumpsuit to do it — at least, not in public. (What you wear at home is your own business!) Fortunately, there are hundreds of easier ways to pay less. You just need to start with a plan. That’s where we take the stage. Just hit “reply” to this email and let us know you’re ready to get started!